(As adopted by the Board of Directors on 27th September 2018)
Last updated on 14 September 2022
The directors recognize the importance of sound corporate governance. As directors of a company whose shares are traded on AIM, the Board has adopted the Quoted Alliance’s Corporate Governance Code 2018 (“the QCA Code”). In addition, the directors have adopted a code of conduct for dealings in the shares of the Company by directors and employees and are committed to maintaining the highest standards of corporate governance. Michael Rosenberg, as non-executive director and Chairman, has assumed responsibility for ensuring that the Group has appropriate corporate governance standards in place and that these requirements are followed and applied within the Group as a whole.
The corporate governance arrangements that the Board has adopted are designed to ensure that the Group delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Group in a manner that encourages open dialogue with the Board. The Board recognizes that their decisions regarding strategy and risk will impact the corporate culture of the Group as a whole and that this will impact the performance of the Group. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Group as a whole and the way that employees behave. A large part of the Group’s activities is centered upon open and respectful dialogue with customers and suppliers. Therefore, the importance of sound ethical values and behaviors is crucial to the ability of the Group to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Group does.
The Board currently consists of five directors, of which two are executive and three are non-executive. The Board has a Chairman, with the CEO being excluded from taking on this role.
The Board is set up to make robust decisions and manage risk. It aims to ensure that a healthy culture is in place which combines a strong focus on performance and a sense shared throughout the workforce of what is acceptable and what is unacceptable in terms of behavior. Therefore, we are committed to:
The QCA Code sets out ten principles that should be applied. The principles are listed below with an explanation of how the Company applies each principle, and the reasons for any aspect of non-compliance. Where reference is made to the Annual Report, it is a reference to the latest annual report which can be viewed at: https://assets-global.website-files.com/61970204de2f86d6bd4f843d/62543494cd405d0b9cf3fbc9_20220304_starcom_consolidated_financial_statements_2021.pdf
Principle One: Establish a strategy and business model which promote long-term value for shareholders.
t42 has five different families of products, all of which are connected to its software as a service (SAS) platform. The Company actively pursues a new product development strategy using in-house technical skills and experience to improve and develop new products. The Board is constantly reviewing the Company’s strategy and guides senior management on the best use of available resources.
Further detail on the Company’s strategy and business model can be found on page 7 of the Company’s annual report.
Principle Two: Seek to understand and meet shareholder needs and expectations.
The Board welcomes contact from investors via the Company’s brokers (Peterhouse), PR firm and via the website. The Board and its senior management regularly initiate meetings with investors to share achievements and to understand shareholder expectations. All shareholders are encouraged to attend the Company’s Annual General Meetings where they can meet and directly communicate with the Board. The Group receives regular comment and feedback from shareholders via its website and through direct communication. The Directors believe that these methods of shareholder engagement are sufficient to support the Company’s aims in meeting their needs and expectations.
Principle Three: Take into account wider stakeholder and social responsibilities and their implications for long-term success.
The Board reviews from time to time the Company’s relationship with its major customers and suppliers. The Company’s tracking products are sold via distributors, so it has little influence over individual product sales. However, the Board are constantly viewing the distribution network by measuring the performance of individual distributors, and considers feedback received as appropriate.
The Company’s products are manufactured by a variety of sub-contractors and the Board regularly meets these suppliers and inspects their production facilities
The Board is committed to reviewing and assessing stakeholder expectations and guides the Company’s senior management to act in accordance with feedback received.
Principle Four: Embed effective risk management, considering both opportunities and threats, throughout the organization.
The Board is committed to recognize the risks that may threaten the Company’s future, as well as opportunities to support its growth. The Board assesses risks to the Company on an annual basis and acts to mitigate identified risks accordingly.
The annual report (pages 12 and 13) discloses financial risks such as credit risk and forex risk and actions that the Company takes to mitigate these risks. In addition to its other roles and responsibilities, the Audit Committee is responsible to the Board for ensuring that procedures are in place, and are being effectively implemented to identify, evaluate and manage the significant risks faced by the Group.
The Board seeks to avoid over reliance on any single supplier or manufacturer of its products by regularly monitoring prices and alternative suppliers. It also seeks ensure a good spread of clients to avoid any single client dominating sales percentages.
Principle Five: Maintain the board as a well-functioning, balanced team led by the chair.
The Board has two independent, non-executive directors, Michael Rosenberg and Martin Blair, with the former acting as Chairman, and two executive directors the CEO (Avi Hartmann) and CFO (Igor Vatenmacher). All the directors have broad experience both in executive and non-executive positions. The Board obtains in a timely manner all information required to support any of the decisions to be made at board meetings. The Board is well supported by the Audit Committee and the Remuneration Committee. All directors are committed to invest the time necessary to fulfill their roles. Board meetings take place at least four times a year and more frequently when needed either physically or by phone.
Principle Six: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.
The Board possesses a full set of skills required to support the business of t42. It has a good balance of financial and public market skills and experience.
Michael Rosenberg (Non-Executive Chairman) has many years of experience as a director of public listed companies and as a founder himself of other companies and has considerable financial knowledge.
Avi Hartmann (Chief Executive Officer) has spent his working life as a founder and manager of businesses involved in the tracking and monitoring sector.
Martin Blair (Non-Executive Director) has many years' in very senior financial roles and experience as a Non-Executive Director.
Igor Vatenmacher (Chief Financial Officer) has broad experience in financial roles, both Hi-Tech and Manufacturing companies.
Further details on the directors can be found on pages 7 and 8 of the annual report and on the website, https://www.t42.co.uk/directors.
Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.
Due to the size of the board, there is no formal performance evaluation criteria in place. The chairman takes responsibility for informally evaluating performance of his board colleagues on an annual basis. The Board is aware of the need for succession planning but at this stage in its development this is not a priority since the management is relatively young.
Principle Eight: Promote a corporate culture that is based on ethical values and behaviors.
The Board promotes a corporate culture is that is based on strong ethical and moral values. The Company takes account of employees’ interests when making decisions, and suggestions from employees aimed at improving the Group’s performance are welcomed.
The Company gives full and fair consideration to applications for employment received regardless of age, gender, color, ethnicity, disability, nationality, religious beliefs or sexual orientation.
Principle Nine: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board.
The Board has overall responsibility for promoting the success of the Group. Avi Hartmann, the Chief Executive Officer and Igor Vatenmacher, the Chief Financial Officer, have day-to-day responsibility for the operational management of the Group’s activities. The Non-executive Directors are responsible for bringing independent and objective judgment to Board decisions. In May 2019 the board appointed Mr. Martin Blair as independent non-executive of the Company.
There is a clear separation of the roles of the Chief Executive Officer and the Non-executive Chairman. Michael Rosenberg as the Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision-making and ensuring the Non-executive Directors are properly briefed on matters. The Chairman has overall responsibility for corporate governance matters in the Group and chairs the Remuneration Committee. The Chief Executive Officer has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. He is supported by Uri Hartmann as Chief Technology Officer and Igor Vatenmacher as Chief Financial Officer.
The Company has established properly constituted audit and remuneration committees of the Board with formally delegated duties and responsibilities.
The audit committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on. It receives and reviews reports from the Company's management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The audit committee meets not less than three times in each financial year, with the Company's Chief Financial Officer, Igor Vatenmacher, in attendance, and has unrestricted access to the Company's auditors. Members of the audit committee comprise Martin Blair, who chairs the committee, with Michael Rosenberg as member.
The remuneration committee reviews the performance of the executive directors and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The committee meets as and when necessary to assess the suitability of candidates proposed for appointment by the Board. Members of the remuneration committee comprise Michael Rosenberg, who acts as chairman of the committee, with Martin Blair as member.
Further details on the Audit Committee and Remuneration Committee can be found on page 8 of the annual report.
The corporate governance structure will be reviewed from time to time in the light of any new developments or external advice received.
Principle Ten: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Company regularly communicates with and encourages feedback from its shareholders who are its key stakeholder group. The Company’s website is updated when appropriate to ensure any changes are properly communicated to shareholders. The annual report and accounts will also contain appropriate reference to the corporate governance process.
The Company actively uses social media such as LinkedIn and Twitter subject to overall review by the Chairman in accordance with its social media policy to ensure proper compliance with AIM rules.